S.F. Mayor Ed Lee seeks $1 million loan fund

Economic development

Published 10:50 am, Wednesday, January 25, 2012

Photo: Brant Ward, The Chronicle

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Brenda Buenviaje, owner of Brenda's, worked in the kitchen after the press conference. She may take advantage of the new loan program and has benefitted from previous city loans. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular restaurant called Brenda's on Polk Street. less

Brenda Buenviaje, owner of Brenda's, worked in the kitchen after the press conference. She may take advantage of the new loan program and has benefitted from previous city loans. San Francisco Mayor Ed Lee ... more

Photo: Brant Ward, The Chronicle

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Mayor Ed Lee held a brief press conference on Polk Street to discuss the Sheriff. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular restaurant called Brenda's on Polk Street. less

Mayor Ed Lee held a brief press conference on Polk Street to discuss the Sheriff. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular restaurant called ... more

Photo: Brant Ward, The Chronicle

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Mayor Ed Lee sampled some of the fare at Brenda's, while owner Brenda Buenviaje (right) watched. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular restaurant called Brenda's on Polk Street. less

Mayor Ed Lee sampled some of the fare at Brenda's, while owner Brenda Buenviaje (right) watched. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular ... more

Photo: Brant Ward, The Chronicle

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One of the dining rooms at Brenda's, which is very popular. Owners of Brenda's have taken advantage of previous city loan programs and may use the new loan program. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular restaurant called Brenda's on Polk Street. less

One of the dining rooms at Brenda's, which is very popular. Owners of Brenda's have taken advantage of previous city loan programs and may use the new loan program. San Francisco Mayor Ed Lee announced a new ... more

Photo: Brant Ward, The Chronicle

Image 5 of 5

Brenda Buenviaje, owner of Brenda's, spoke to the press from her restaurant. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular restaurant called Brenda's on Polk Street. less

Brenda Buenviaje, owner of Brenda's, spoke to the press from her restaurant. San Francisco Mayor Ed Lee announced a new loan program for small businesses in the city at the popular restaurant called Brenda's on ... more

Photo: Brant Ward, The Chronicle

S.F. Mayor Ed Lee seeks $1 million loan fund

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(01-25) 10:50 PST San Francisco -- Ismael Diagne has gone from a valet and bellhop at a hotel at Fisherman's Wharf to owner of a company that imports traditional teas from his native Senegal.

The boost that took his Saafara venture from a tiny operation selling loose-leaf tea at street fairs to a company that now has boxed teas on the shelves of Bay Area markets like Rainbow Grocery, Berkeley Bowl and Real Food Co., he said, was a $25,000 city loan designed to grow small San Francisco businesses.

"It was big," said Diagne, a 42-year-old lower Nob Hill resident who used the money to package his teas so they could be stocked on shelves. "Before, (my customers) were just the African community and people who knew about the tea. ... Having access to every customer, that's what the loan has offered me."

On Tuesday, Mayor Ed Lee said there will be plenty more opportunities for such entrepreneurs, introducing a formal request to channel $1 million in city funds to replenish the small business loan fund that has helped Saafara and 26 other budding San Francisco companies.

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The program "has been so successful, we dried up all of these funds," Lee said with a smile in announcing at a Creole restaurant that he plans to more than double funding for the loan program over the next six months.

$1 million was unspent

The $1 million, which must be approved by the Board of Supervisors, is unspent money from the 2010-2011 fiscal year that is not budgeted for a particular purpose, said Jennifer Matz, head of the mayor's economic development office.

It's to be paired with $430,000 contributed by Wells Fargo for small companies in the city's southeastern neighborhoods and payments received on current loans to create a loan pool of about $1.5 million, city officials said.

Lee's November campaign promises also included budgeting $5 million for the small business loan fund for the fiscal year that starts July 1.

Small companies based in San Francisco that have been denied a bank loan and pledge to create or retain at least one low-income job can receive loans from $5,000 to $50,000 at interest rates of 4 to 6 percent.

Began under Newsom

The program began in 2009 as former Mayor Gavin Newsom sought ways to stimulate the local economy in the wake of the financial crisis.

City officials found $665,000 in federal Department of Housing and Urban Development funds that could be used for loans but had been lying dormant in city accounts because historically the loans had a high default rate and the city had stopped making the loans, Matz said.

So the city partnered with Working Solutions, a nonprofit that specializes in microloans, to administer the small business revolving loan program.

The initial $665,000 has been loaned to companies ranging from a granola maker to a hair salon, with all borrowers current in their payments, according to city figures. Two borrowers, both issued loans in 2010, have fully repaid their loans. The loans have jump-started or expanded businesses that created 73 jobs, according to the mayor's office.

"This is a program that has just worked splendidly," Matz said. "There hasn't been one default. ... We felt like this was a model that really worked."

Future projects

One person considering applying for the funds is Brenda Buenviaje, owner and executive chef of Brenda's French Soul Food, who tapped into other city business loan and assistance programs to help open and expand her wildly popular restaurant on a gritty patch of Polk Street near the Civic Center.

"I am looking at future projects," said Buenviaje, who may apply for one of the loans to open a second, smaller restaurant, perhaps a po' boy shop, in a neighborhood like the Bayview or Fillmore jazz district.

"Now that I've been through the process," she said, "I'm totally down with trying that again."

Learn more

Information about the small business revolving loan fund can be found at sfgate.com/ZLGN.

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